Job Retention Scheme: essential update for care providers
There is a growing amount of guidance on the CJRS, here are links for your ease of reference:
HMRC guidance for employers: click here
Treasury Direction: click here
HMRC guidance for employees: click here
Step-by-step guide: click here
Guide to working out 80% of wages: click here
1. Extension of CJRS to 30 June 2020
The CJRS was initially for a 3 month period, ending on 31 May 2020. However, this has now been extended to 30 June 2020. Make sure that this extension is reflected in your agreements with staff who have been, or will be, furloughed.
2. Statutory Sick Pay extended to shielding employees
On 15 April, the Government extended entitlement to SSP to staff in the extremely vulnerable group who have been advised to shield for 12 weeks and are unable to work as a result (i.e. they can’t work from home).
If you are eligible for the Government's SSP rebate scheme, you can claim for these staff. However, the rebate is limited to the first 2 weeks of absence and has not been extended to the 12 week shielding period.
3. Can shielding employees be furloughed?
It was previously clear that shielding employees could be furloughed; however, this is complicated by the fact that they are now entitled to SSP.
If shielding staff are furloughed on or after 16 April (when they became entitled to SSP):
- The Employers' CJRS guidance currently states that employers are entitled to furlough employees who are unable to work because they are shielding in line with public health guidance.
- However, the Treasury Direction (which takes precedence) appears to state that an employee cannot be furloughed while they are entitled to SSP, irrespective of whether they are actually receiving it. As shielding employees are now entitled to SSP there is therefore a risk that you will not be able to recoup the cost of furloughing them under the Scheme.
- The position is complicated further by the Explanatory memorandum to the Coronavirus Amendment No. 3 Regulations which introduced the right to SSP. It states at paragraph 7.2 that: "This instrument ensures entitlement to SSP in cases where people are unable to work because they are shielding themselves in accordance with the guidance and where they meet the SSP eligibility criteria as set out above in 6.1. This is intended as a safety net for individuals, in cases where their employer chooses not to furlough them under the Coronavirus Job Retention Scheme."
- The Government extended SSP entitlement to shielding employees with greater protection. It therefore seems hard to believe that the Government could have intended for employers to lose the ability to furlough them. However, it would be helpful to get further clarification given the inconsistencies in the guidance.
If the shielding staff have been furloughed before 16 April:
- their newly acquired status of being deemed incapable of work (and entitled to SSP) should not prevent them from continuing to be furloughed. This is because the Employers' CJRS guidance and Treasury Direction both appear to say that it is up to employers to decide whether to move furloughed employees who become sick during furlough leave onto SSP or keep them on furlough.
4. Can holiday be taken during furlough leave?
HMRC has issued its first guidance on annual leave during furlough leave, as follows:
- Workers continue to accrue annual leave during furlough.
- Workers are entitled to take annual leave during furlough (subject to your flexibility to restrict when leave can be taken if there is a business need)
- Holiday pay should be "usual holiday pay in accordance with the Working Time Regulations 1998" and "employers will be obliged to pay the additional amounts over the grant". This suggests that where furlough pay is 80% of normal wages, you will be required to make it up to 100% of normal (i.e. pre-furlough) wages for annual leave.
- The guidance is silent on whether you can require staff to take holiday when furloughed.
The guidance states, "During this unprecedented time, we are keeping the policy on holiday pay during furlough under review", so there could be changes ahead.
What's old and unresolved?
Can care providers in receipt of public funds claim under the CJRS?
Unfortunately there is still no definitive guidance on whether (and to what extent) care providers in receipt of public funding can furlough staff and claim under the CJRS. We have been pushing for clarity on this as it is preventing many providers from furloughing staff.
We have been liaising with Darren Jones MP who has written to Chancellor Rishi Sunak asking for clarification on the public funding condition for care providers. We await a response.
The current position is:
- The CJRS Employer Guidance still contains the public funding condition in the same terms as earlier guidance. Despite numerous other updates to the guidance, this section has not changed.
- The Government released a Treasury Direction to HRMC on the CJRS. This makes no mention of the "public funding" condition at all.
- The Department of Health and Social Care released the Social Care Action Plan last week, which says: "Where social care workers are unable to work for a long period of time, because they are in a high-risk group, or because they are shielding during the outbreak, employers can furlough these workers, to ensure that they continue to receive 80% of their normal income."
- A draft document apparently produced by DHSC and the Treasury specifically on the public funding point has been circulating but has not become published guidance. It should therefore be treated with caution.
We hope that HMRC will accept the DHSC statement in its Social Care Action Plan that shielding employees and those at high risk can be furloughed. It would provide more reassurance if some more detailed guidance was issued. If you have furloughed based on this guidance from DHSC, you should keep a copy in case you need it for any subsequent HMRC audit.
There are, however, other circumstances where you may need to furlough. For example, a reduced need for staff due to reduced occupancy levels or care visits caused by an increasing number of Covid19 deaths. Urgent guidance is needed to confirm whether you can furlough and claim under the CJRS in these circumstances.